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To Order the Book Visit Amazon.Com Or Call the Publisher at 888.280.7715 “Charles Konigsberg has done a great service for American taxpayers--giving all of us a clear, direct and meaningful guide to the $3 trillion of our money that goes to the government to fund programs that shape our daily lives (for better or worse.) For one used to wading through gobbledygook or impenetrable jargon, the plainspoken, straightforward actual English in this book is especially refreshing. Every American concerned about federal taxing and spending--Democrat, Republican or other, budget analyst or average citizen--should have this book.” Norman Ornstein, Resident Scholar, American Enterprise Institute “This is an extremely useful book--both for those seeking a comprehensible introduction to the complexities of the federal budget and to practitioners needing a quick refresher course.” Alice M. Rivlin, former Director, Office of Management and Budget, and Congressional Budget Office “Charles Konigsberg, who advised my good friend Pat Moynihan on fiscal policy, explains in clear and concise language why the United States is on a dangerous fiscal path, with entitlement programs, particularly the health care entitlements, growing at an unsustainable rate due to rapidly rising health care costs.” Bob Kerrey, former Senator from Nebraska and co-chair of the Kerrey-Danforth Bipartisan Commission on Entitlement and Tax Reform “Anyone needing to know how the U.S. government raises and spends $3 trillion each year, will find the answer in Charles Konigberg's indispensable guide to the budget process and its consequences. America's Priorities is a must-have reference for all concerned citizens.” Matthew Winkler, Editor-in-Chief, Bloomberg News With two decades of bipartisan experience in the White House and Senate, Charles S. Konigsberg, who now publishes Appropriations.com, Fed.Tax, and GovBudget.com, explains in clear, nonpartisan language how the U.S. government raises and spends $3 trillion per year. The book provides plain English explanations of major Federal spending programs, Federal taxes, the budget process and the swing from deficits in the 1980s to surpluses in the late 1990s and back to rapidly increasing debt. A broad spectrum of readers will value the book as a vital resource: journalists, political and financial commentators, the government and financial sectors, academia, and voters looking for a nonpartisan explanation of how the President and Congress are prioritizing our public resources. To order the book visit Amazon.com or call the publisher at 888.280.7715. Paperback (8.25x11) $19.95 ISBN: 9781434360137 Dust Jacket Hardcover (6x9) - $29.95 ISBN: 9781434360120 00_frontmatter.qxp 11/20/07 10:23 AM Page iii For my son Eddie and all of his generation who deserve to inherit a strong and prosperous America that remains the democratic ideal for all of humanity 00_frontmatter.qxp 11/20/07 10:23 AM Page v Summary of Contents Foreword Preface Acknowledgments I. Introduction: America’s Priorities II. Unlocking the Mysteries of the Federal Budget Process III. Spending: How America Spends $3 Trillion Per Year IV. Revenues: How America Raises $3 Trillion Per Year V. Tax Expenditures: Spending on the Revenue Side VI. In the Wink of an Eye: From Deficits to Surpluses and Back to Deficits VII. Current Fiscal Policy is Unsustainable: Non-Partisan Principles to Secure Our Nation’s Future Appendices Index v 00_frontmatter.qxp 11/20/07 10:23 AM Page vii Table of Contents Foreword ix Preface xi Acknowledgements xiii Summary of Contents xv I. Introduction: America’s Priorities 1 II. Unlocking the Mysteries of the Federal Budget Process 3 2-1. Preparation of the President’s Budget 5 2-2. The Congressional Budget Process 7 2-3. Implementation of Spending Laws 29 2-4. Budget Enforcement 33 2-5. The Government as Banker: Federal Credit Reform 49 2-6. The Federal Unfunded Mandates Reform Act 51 2-7. Performance-Based Budgeting 57 2-8. Budget Process Reform Proposals 63 2-9. Key Budget Concepts 75 III. Spending: How America Spends $3 Trillion Per Year 93 3-1. Defense and Intelligence Spending: From “Peace Dividend” in the 95 1990s to Rapid Growth Since 2000 3-2. Department of Homeland Security 123 3-3. Veterans Benefits 163 3-4. Social Security: Is it Stable or Facing Collapse 169 3-5. Interest Payments—The Fourth-Largest Federal “Program” 181 3-6. Health Care: The Nation’s Greatest Fiscal Challenge 187 Medicare 189 Medicaid 194 Public Support of Teaching Hospitals 201 vii 00_frontmatter.qxp 11/20/07 10:23 AM Page viii viii CONTENTS State Children’s Health Insurance Program (SCHIP) 203 U.S. Public Health Service Agencies: Surgeon General and the Commissioned Corps 205 Agency for Healthcare Research and Quality 207 Centers for Disease Control and Prevention 208 Food and Drug Administration 209 HRSA: Community Health, HIV/AIDS, MCH, NHSC 212 Indian Health Service 217 National Institutes of Health 219 Substance Abuse and Mental Health Services Admin. 222 Biomedical Advanced Research and Development Authority 224 3-7. Education and Children’s Programs 233 Head Start 233 Child Care 235 Child Nutrition and Women, Infants, and Children (WIC) 237 Child Welfare 239 Elementary and Secondary Education 240 No Child Left Behind 241 Special Education and Individuals with Disabilities Education Act 243 Higher Education 244 3-8. Helping People in Need Earned Income Tax Credit 253 Supplemental Security Income for the Aged, Blind and Disabled 255 The Food Stamp Program 257 “Welfare”—Temporary Assistance for Needy Families (TANF) 258 Housing Assistance 259 Low-Income Home Energy Assistance (LIHEAP) 263 Unemployment Compensation 264 3-9. Transportation Programs 271 Federal-aid Highway Program (Highways and Bridges) 272 Public Transportation 276 Financing Air Traffic Control and Airport Improvements 277 Amtrak 279 Transportation Safety 280 3-10. Law Enforcement and Administration of Justice 283 FBI 284 DEA, ATF, and U.S. Marshals Service 285 Federal Prison System 287 U.S. Attorneys and DOJ Legal Activities 289 Justice Programs: Grants for State and Local Law Enforcement 289 3-11. Environment, Energy, and Natural Resources 293 Environmental Protection Agency 294 Energy Programs 296 Expenditures on Basic Science, Research and Development 298 Natural Resources: Stewardship of Public Lands, Waterways, 299 and Wildlife 00_frontmatter.qxp 11/20/07 10:23 AM Page ix CONTENTS ix 3-12. Farm Programs 303 Commodity Programs 303 Conservation Programs 306 Crop Insurance and Emergency Assistance 306 Agricultural Research and Education 307 Marketing and Regulatory Programs 308 Farm Credit 309 3-13. International Affairs 313 Economic Development Aid 314 Humanitarian Aid 317 Military Aid and Security Assistance 319 Counter-Narcotics and Law Enforcement 320 State Department and Conduct of Foreign Affairs 321 Contributions to the United Nations and other International Orgs 322 IV. Revenues: How America Raises $3 Trillion Per Year 327 Overview of U.S. Taxes 327 Individual Income Taxes 327 Payroll Taxes: Social Security and Medicare Hospital Insurance 331 Corporate Income Taxes 332 Estate and Gift Taxes 333 Excise Taxes, Duties, and Misc. Receipts 336 The “Tax Gap” 337 How Do U.S. Taxes Compare to Other Countries? 340 Tax Fairness, Reform, and Distribution of the Tax Burden 340 V. Tax Expenditures: Spending on the Revenue Side 349 Significant Tax Expenditures 356 VI. In the Wink of an Eye: From Deficits to Surpluses and Back to Deficits 363 A Brief History of Deficits and Surpluses 363 The Triple-Digit Deficits of the 1980s 364 The Budget Agreements of the 1990s Lead to Surpluses 364 Current Decade: Exploding Deficits Lead to Massive Debt 366 Causes of the Deficit/Debt Explosion 367 Top Officials Agree U.S. is on a Dangerous Fiscal Path 371 Do Deficits Matter? 373 VII. Non-Partisan Principles to Secure Our Nation’s Future 379 APPENDICES A. Budget Process Timetable 383 B. Budget Points of Order in the Senate and House 386 C. Major Laws Governing the Federal Budget Process 395 D. Statutory Deficit of “Entitlement” 398 E. Revenue Bills and the Origination Clause 400 00_frontmatter.qxp 11/20/07 7:16 PM Page x x CONTENTS F. Historical Table – Budget Resolutions 401 G. Example of Budget Resolution Totals 404 H. Example of Budget Reconciliation Instructions 406 I. Example of Budget Resolution Reserve Funds 408 J. Example of Budget Resolution 302(a) Committee Allocations 410 K. Example of Appropriations 302(b) Sub-Allocations 412 L. Explanation of the Senate’s Byrd Rule 413 M. Historical Table – Reconciliation Bills 415 N. Historical Table – Completion of Appropriations Bills 418 O. Appropriations – Rules Governing Floor Consideration and Conference 419 P. 2004 PART Questionnaire 424 Q. 2007 Federal Poverty Level 426 Index 427 00_frontmatter.qxp 11/20/07 10:23 AM Page xi PREFACE merica’s Priorities explains in clear, concise, and nonpartisan language how the U.S. gov- A ernment raises and spends $3 trillion per year. It provides plain English explanations of Federal spending programs, Federal taxes, recent budget history, the looming budget crisis, and how the complex budget process operates. Journalists and political commentators will find the book a useful reference source and consistently nonpartisan in its presentation. Recalling my experience as a new Senate staff member, I have included in America’s Pri- orities a comprehensive, nonpartisan overview of the congressional budget process and Fed- eral Budget, aiming to provide a reliable introduction for congressional staff and new Members of Congress. Finance professionals will find this book useful in navigating the daily barrage of con- flicting numbers and political rhetoric as they attempt to distinguish fact from opinion, and discern where fiscal policy is really heading. I’ve taken my cue from my former boss, the late Senator Daniel Patrick Moynihan, who famously said, “Everyone is entitled to his own opin- ion, but not his own facts.” College and university professors will find the subject matter relevant and thought-pro- voking for several disciplines—political science, economics, a broad spectrum of public pol- icy areas, and public administration.
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